[danielhunt]

I'm not English, I don't live in the UK, but the approach and wording in this article bothers me.

Are these companies "sell outs" because they sold, or because they sold to foreign companies?

Shouldn't they be lauded as successes for having been sold in the first place? Is this part of the problem that the root of the article (as I see it) is actually talking about?

[tomhoward]

The article doesn't go into the the substance of this topic, but I've learned a bit about the issue from talking to friends who work in government economic development roles here in Australia.

The balance they're trying to strike is between attracting foreign investment vs losing companies via foreign acquisition.

Foreign investment (along with export revenue) is great, as it creates jobs, grows ecosystems, increases demand for the currency, etc.

Foreign acquisition is not so great, as the jobs/expertise/ecosystems and export revenue are lost.

Of course, if the founders/early investors go on and invest their returns in new local companies, then that's a good thing, but is perhaps beyond the scope of what governments are able to measure (or generate PR from).

I have no strong opinions about how sensible this attitude from governments is; I just know that's how they think, at least in Australia, and probably in the UK too.

[zelos]

It does seem pretty odd. As a UK citizen, am I meant to feel proud of the existence of ARM for some reason? And presumably now I'm no longer allowed to use ARM chips because they've betrayed 'us'?

[gaius]

No-one should forget that ARM's predecessor Acorn "sold out" to Italy's Olivetti too...

[raesene6]

I think that the main part of the problem is the sales are to foreign companies.

Many companies tend to focus efforts in their home countries and there's always a risk that a foreign acquisition will see its operations downsized in their native country and moved either to the home country of the acquiring company or to a low-cost cost location.

Also from a tax perspective, foreign companies don't generate as much revenue for the British government, so every time one is purchased by a foreign company that's more long term tax revenue lost.

[pyb]

The issue is that these companies were doing really well, got acquired as a result, but then mostly shrivelled to nothing. Let's hope ARM doesn't get cursed that way...

[zigzigzag]

Well, no, they weren't. With the exception of ARM that genuinely is doing very well, quite a few of the others sold out because they weren't doing well. In the case of SwiftKey it sounds like they were losing money and decided to double down on it by giving it away for free and then charging for things nobody cared about!

SwiftKey's problem is that they had a tiny window of time after inventing it where they could have charged lots of money to power users before the Android team just included their invention in the core product. Apparently they were unable to capitalise on that time and ended up selling to Microsoft who now gets to fund their loss-making product. Although I loved SwiftKey as a product, business wise I'm not sure that's a loss for the UK.

[pyb]

But that's not the story with Sinclairs/Amstrad, who both launched bad products at some point, and never recovered from it.

[FuckOffNeemo]

I believe the article is suggesting London or the UK, is hindered when trying to compete with SV or other similar start-up\technology based cities. That most companies (though the examples in the article aren't the greatest) are bought out or shifted off shore inhibits the UK from developing that scene further.

I'd suggest it's a little more complex than just starting a company and not selling out to a larger competitor. London is not Silicon Valley. Never has been and any opportunity to cultivate that type of culture within the city will surely be even more challenging with the Brexit?

But I digress. When the Brexit vote is enacted, I suspect we'll find business and investment into start-ups in the UK continuing to diminish in favour of EU based states or else where.

Actually. You could really say this about almost every industry in the UK with the exception of the Banking and Financial sector, they're all diminishing in favour of offshore? If they haven't already anyway? That's profound.

Source: ex-pat from the UK

Edit: words, additional statements.

[zigzigzag]

When it comes to exports and national GDPs perception and reality often rarely align.

Example: almost everyone thinks UK manufacturing has been in decline for decades. In reality when measured in absolute amounts the UK manufactures more than ever before. People think it's declined only because it employs fewer people (but still manages to make more). A more optimistic way to look at it would be to say that UK manufacturing has become wildly more productive than in the past.

So when you say they're "diminishing" you need to square that with the fact that the UK economy is actually doing pretty well, by European standards, hence the large migratory net inflows as people vote with their feet.

[fauigerzigerk]

Of course they should be lauded for being a success, but that doesn't change the fact that having headquarters is good for a country/city.

Because that's where the corporation pays most of its taxes (usually), and that's where the most interesting jobs are going to be.

[kalleboo]

In comparisons between the US and Europe, you often hear the argument that Europe doesn't have a Google, Apple or Microsoft. But how can you build one if every promising start up gets bought up by a foreign company?

[mojuba]

I suppose they are "sell outs" in a sense that Apple, Microsoft and Google are not.